IT dept raids Chinese firms in Rs 1,000 crore money laundering case

Income Tax Department has raids against some Chinese individuals for allegedly running an estimated ₹ 1,000 crore worth money laundering racket which were using shell or dubious firms, the Central Board of Direct Taxation (CBDT) said today.

IT dept raided at least two dozen premises in Delhi, Gurgaon and Ghaziabad as part of the operation under which it covered the Chinese, some of their Indian associates and bank officials, the Central Board of Direct Taxes said in a statement.

The CBDT said that "subsidiary of Chinese company and its related concerns have taken over ₹ 100 crore bogus advances from shell entities for opening businesses of retail showrooms in India". It is the policy-making body for the tax department.

The CBDT said "credible inputs that a few Chinese individuals and their Indian associates were involved in money laundering and hawala transactions through a series of shell entities."

They informed that, Chinese man had made the fake Indian passport from Manipur and has been detained by the department as searches are continuing.

While sharing the information of alleged possession of fake Indian passport with police authorities, they said they will book him for violation of the Passport Act.

The police will arrest him and even the Enforcement Directorate is supposed to take over the case for investigation under the criminal provisions of the Prevention of Money Laundering Act, they said.

"Search action revealed that at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities, entering into credits of more than ₹ 1,000 crore over the period," the CBDT said.

"Incriminating documents of hawala transactions and money laundering with active involvement of bank employees and Chartered Accountants have been found as a result of the search action.Evidences of foreign hawala transactions involving Hong Kong and US dollars have also been unearthed'', the CBDT added.